MBE Contracts Missed PQs
A maker of perfume contacted a manufacturer about supplying 1,000 readily available glass bottles for retail sales of the perfume. The manufacturer offered to supply the bottles and to ship them within one week. The perfumer responded, "Ship them as soon as possible." The manufacturer shipped 1,000 bottles to the perfumer five days later. The perfumer accepted the bottles and filled them with perfume. Without waiting for the manufacturer's invoice, the perfumer sent a payment to the manufacturer based on a price of $2.50 per bottle. Prior to receiving this payment, the manufacturer sent the perfumer an invoice, which reflected a charge of $3.50 per bottle. When the perfumer refused to pay $3.50 per bottle, the manufacturer returned the payment to the perfumer and initiated an action for the price. The court determined that a reasonable price for the bottles at the time of delivery was $3.25 per bottle. What amount should the court award the manufacturer per bottle?
$3.25, because this was a reasonable price for the bottles at the time of delivery. When a buyer and seller have entered into a contract for the sale of goods, the UCC provides that a court may supply the missing term, including the price of the goods. If a contract omits price, the UCC supplies a reasonable price at the time of delivery. In this case, the perfumer and the manufacturer have entered into a contract for the sale of goods, as the manufacturer shipped the bottles and the perfumer received and accepted them. Because the price term is missing, the price will be a reasonable price at the time of delivery, which in this case is $3.25 per bottle.
A collector agreed to sell his collection of authentic extras' costumes from a cult classic 80's show to a costume store for $10,000, payable one month after the collection was delivered to the store via a third-party carrier. Due to the time and expense that went into accumulating and repairing the costumes, the collector expected a $2,000 profit. The costumes suffered minor water damage in transit, and the store immediately notified the collector that it was rejecting the collection and would hold the collection until the collector picked them up. The collector told the store that he would look for a new buyer and would pick up the collection in a few weeks. The collector quickly found another buyer willing to pay the original contract price. However, before the collector retrieved the costume collection, the store sold and delivered the costumes to a theater company who knowingly accepted the costumes despite the water damage. The theater company paid the store $15,000 for the collection, which the store retained. If the store's sale of the costume was NOT an acceptance, what is highest value remedy available to the collector?
$15,000, damages for conversion. The store's rejection of the collection was proper under the perfect tender rule, but the store's selling the collection to the theater company constituted conversion. The remedy for conversion is the fair market value of the goods at the time of the conversion of the collection. The $15,000 received by the store from the sale of the collection reflects the collection's fair market value at the time of the conversion.
At the beginning of the week, a homeowner met with a contractor regarding remodeling a bathroom in her home. At the conclusion of their meeting, the contractor told the homeowner that he would charge her $5,000-$6,000 for the work, but that he would get back to her with a final price. When he arrived at his office later that day, the contractor opened an email from the homeowner that she had sent earlier. In the email, she stated that she would pay the contractor $5,000 for the job. The next day, the contractor responded by email that he could not complete the work for less than $5,500. The homeowner replied by email that she couldn't pay $5,500, but that, if the contractor changed his mind, he could begin work before the end of the week. The contractor received the email, but did not respond. The contractor appeared the next day at the homeowner's house and began remodeling the bathroom. Which of the following statements regarding the relationship between the parties is most accurate?
A contract was formed at the price of $5,000. An offer is terminated by rejection. A counteroffer acts as a rejection of the original offer and creates a new offer. A terminated offer may be revived by the offeror, however. As with any open offer, the revived offer can be accepted by the offeree. The contractor accepted the revived offer by appearing at the homeowner's house and beginning to remodel the bathroom.
At the auction of construction equipment owned by a contractor, several lots were offered for bidding and the highest bids for each were accepted by the auctioneer. The auctioneer then announced that a lot that consisted of a backhoe was being auctioned off. Several bids for the backhoe were acknowledged by the auctioneer. Just before the auctioneer brought down her gavel, she glanced at the contractor. The contractor gave the auctioneer a prearranged signal. Acting in accord with the signal, the auctioneer stated that the backhoe was being removed from the auction. There had been no indication as to whether the auction was being held with or without reserve. The highest bidder on the backhoe, contending that he is now its owner, has brought suit against the contractor. How should the court rule?
For the contractor, because the auctioneer had not brought down the gavel, announcing the completion of the sale of the backhoe. Unless specifically announced otherwise, an auction is with reserve, meaning that the seller has the right to withdraw an item from sale at any time before the auctioneer announces the completion of the sale. Here, because the backhoe was withdrawn from the sale before the auctioneer announced the completion of the sale by bringing down the gavel, the contractor remains the owner of the backhoe.
An independent trucker and a manufacturer entered a contract for the delivery of a farming implement from the manufacturer to a farmer. Under the terms of the written contract, the trucker promised "to deliver a farming implement from the manufacturer to the farmer," and the manufacturer promised "to pay the trucker if the trucker delivers the implement directly to the farmer after picking it up." The trucker picked up the implement, but instead of driving directly to the farmer, drove 100 miles out of his way to pick up another item from a third party before delivering the implement to the farmer. The manufacturer, unaware that the trucker failed to deliver the implement directly to the farmer, refused to pay the trucker. Who has breached this contract?
Neither the trucker nor the manufacturer. A breach of contract can only occur when a party fails to perform a duty that has become due. Because the trucker performed his contractual duty and because the manufacturer's duty was subject to an unsatisfied express condition precedent, neither party here is in breach of the contract.
A chemistry professor offered to sell her colleague an autographed first edition novel for $1,000. The professor provided her colleague with a signed written statement specifying the terms of the offer, and stating that the offer would remain open for one week. Two days later, the colleague learned that the professor had sold the book to someone else in their department. The next day, the colleague showed up at the professor's office with $1,000, asking to purchase the book. The professor apologized, saying that the book had already been sold. Is the colleague likely to succeed in an action for breach of contract?
No, because the colleague learned that the book had been sold before accepting the offer. In general, an offer can be revoked by the offeror at any time prior to acceptance. An offer is revoked when the offeror makes a manifestation of an intention not to enter into the proposed contract. If the offeree acquires reliable information that the offer has taken definite action inconsistent with the offer, the offer is automatically revoked. In this case, because the book was a unique term, the offer was revoked when the colleague learned that the professor had already sold the book.
A mining company contracted with a railroad to transport 10,000 tons of coal from the company's mines to a power company at a cost of $100,000. The railroad told the mining company that the coal would arrive at the power company on June 1, but the contract contained a clause that the railroad would not be liable for any losses suffered by the mining company as a result of a late shipment. The railroad was aware that the mining company had contracted with the power company to deliver the coal on June 1, and pursuant to standard industry custom, the price to be paid by the power company decreased by $1 per ton for each day that the coal was late. The shipment of coal did not reach the power company until June 11, and the railroad had no justification for the 10-day delay. Because of the delay, the mining company lost $100,000 in revenue from the sale. The mining company filed suit against the railroad for breach of contract, claiming $100,000 in damages. Is the mining company likely to succeed in its claim?
No, because the contract between the mining company and the railroad protected the railroad from losses suffered by the mining company due to a late shipment. Although a party may be liable for consequential damages of the other party to a contract where those damages are foreseeable, a party may eliminate that liability through an agreement with another party. Here, while the railroad was aware of the mining company's liability for failing to supply the power company with coal on June 1st, the contract between the railroad and the mining company eliminated the railroad's liability for any losses the mining company suffered due to late delivery.
In January, a local farmer contracted with a chef to sell the chef a specified amount of local organic tomatoes to be delivered on August 1. On June 15, the farmer called the chef to tell him that part of his crop was infested with tomato fruitworms, and he was unsure that he would be able to deliver the full amount requested by August 1. The chef told the farmer that it was absolutely essential that he receive those tomatoes on time to make organic tomato sauce for a restaurant scheduled to open in August. The farmer assured him that he would do his very best to save the crop and deliver by August 1. Does the chef have valid legal grounds to cancel the contract and order tomatoes from another source?
No, because the famer did not state unequivocally that he could not deliver the tomatoes on time. Anticipatory repudiation occurs when there has been an unequivocal refusal of the buyer or seller to perform, or when reasonable grounds for insecurity arise with respect to the performance of either party, and the other party fails to provide adequate assurances within a reasonable time. Mere expressions of doubt as to a party's ability to perform do not constitute an anticipatory repudiation. Therefore, the farmer has not repudiated, and the chef is still bound to the contract.
On March 1, the owner of a ferry boat that operated only during daylight hours during the summer months of June, July, and August entered into a written agreement with a man to serve as the captain of the boat for the upcoming season. On May 1, the owner contracted with a woman to serve as the captain of the boat. On May 30, the man was diagnosed with an illness, and the treatment for this illness prevented him from being employed until the following year. On May 31, the owner, learning of the man's illness, told him not to worry about their contract, as he had found someone else to serve as captain of the ferry boat. The woman served as captain of the ferry boat for the summer months of June, July, and August that year. On September 1, the man sued the owner for damages based on a breach of their contract. Will his suit succeed?
No, because the man was unable to serve as the captain of the boat during the summer months. The owner's contract with the woman to serve as the captain of the ferry boat constituted an anticipatory breach of the owner's contract with the man, because the owner would not have been able to employ both the man and the woman as the captain of the ferry boat. Despite this breach, however, the owner's duty to pay damages to the man was discharged by the man's inability to have served as the captain of the ferry boat. Despite this breach, however, the owner's duty to pay damages to the man was discharged by the man's inability to serve as captain of the ferry boat.
The owner of a rare eighteenth-century chest offered to sell it to a connoisseur of antiques for $75,000. The connoisseur countered that she would buy the chest for $50,000. The owner rejected this price. The owner and the connoisseur then executed a written agreement for the sale of the chest at a price to be determined only by an antiques dealer whose expertise in valuing this rare item they both trusted. The dealer examined the chest. He told the owner and the connoisseur that he had to do further research on the chest, but that he would let them know his decision in several days. Unfortunately, the dealer died before doing so. A reasonable price can be established for the chest by the court. Is there likely an enforceable contract?
No, because the owner and the connoisseur did no intend to be bound unless the dealer set the price of the chest. When parties enter into an agreement for the sale of goods and the price has not been set, there is no contract if the agreement reflects intent not to be bound unless the price is subsequently set and the price is never set. Here, the owner and connoisseur agreed to the sale of the chest only at a price set by the dealer. Because the dealer did not set a price before his death, there is no enforceable agreement for the sale of the chest.
The owner of a retail clothing store regularly displayed for-sale works by local artists on a wall in the store. An art collector who came into the store inquired about purchasing a particular work for display at his home. The two agreed upon a price, but the collector was not ready to commit to purchasing it immediately. Confident that the collector would purchase the work, the owner promised in a signed writing to sell the work to the collector at the agreed-upon price at any time before the end of the month. On the last day of the month, the collector sent the owner a check for the agreed upon price, which the owner received on the following day. If the owner returns the collector's check and refuses to sell the artwork to the collector, which of the following best supports the owner's position that a contract had not been formed?
The collector's acceptance of the owner's offer was not timely. Although under the mailbox rule an acceptance is effective upon dispatch, the mailbox rule will not apply when the offer is irrevocable. Instead, in such case, the acceptance must be received before the offer expires. Here, the owner promised to hold her offer open until the end of the month. In order to be effective, the acceptance had to be received by the owner before the end of the month. Therefore, the best argument in favor of the owner's position is that the collector failed to accept the offer by the last day of the month, because the check arrived a day later.
A dancer signed a contract with a traveling circus to travel and perform as an aerialist for six months. The contract provided that the dancer would be paid $500 per week and would be guaranteed employment for the full six months, with an option to renew the contract for the next traveling season. Excited for the opportunity to perform for a traveling circus, the dancer turned down an invitation to dance with a theatre group for the same time period as the circus contract. After two weeks of traveling and dancing for the circus, the dancer sprained her ankle and was briefly hospitalized for one week. The circus was forced to hire another aerialist. After an additional week, the dancer's doctor gave her approval to return to work, but the circus refused to honor the remainder of the contract. The dancer brought an action against the circus for breach of contract. If the dancer wants to recover the highest possible amount of damages, which of the following is the dancer's best legal theory?
The dancer's failure to perform for two weeks was not a material breach of the contract. Under common law, a material breach of contract occurs when the nonbreaching party does not receive the substantial benefit of its bargain. A material breach of contract allows the nonbreaching party to withhold any promised performance and to pursue remedies for the breach, including damages. A breach is considered minor when the breaching party has substantially performed. In this case, if the dancer is able to successfully argue that a two-week delay is only a minor breach and that she otherwise substantially performed under the contract, then she will be able to recover damages.
A homeowner entered into a written contract with a contractor to construct an elaborate tree house among the large trees located in the homeowner's backyard. After commencing construction of the tree house, the contractor discovered that one of the trees intended to be used as support for the tree house had a relatively common fungal infection in its core that would cause the strength of the tree's branches to falter if left untreated. Neither the homeowner nor the contractor had knowledge of the fungal infection when they entered into the contract, but the contractor knew that such infections were common in the area and did not request an inspection of the trees before entering the contract. The contractor also knew that treatment was available at a high cost, but even after treatment, he would need to create additional heavy-load bearing supports for the tree at a substantial cost. When the contractor informed the homeowner that he would not perform under the contract unless the homeowner provided at least 75% of the additional costs needed to make the structure safe, the homeowner refused to pay the additional amount. The homeowner then sued the contractor for breach of contract. What is the likely result?
The homeowner wins, because the contractor assumed the risk of fungal infection. For the defense of impracticability to be available, an unforeseeable event must occur and the nonoccurrence of that event must have been a basic assumption on which the contract was made. If a party assumes the risk of an event happening that makes performance impracticable, then the defense of impracticability will not apply.
A licensing agreement provided that a manufacturer could use an inventor's patent in manufacturing its products for ten years. Immediately thereafter, the inventor assigned his rights to receive payments pursuant to the licensing agreement to a corporation in which he was the controlling shareholder. The inventor did not receive compensation for this assignment. The inventor, upon his death five years later, devised his stock in the corporation to his daughter, and all of his remaining property to his son. To whom should the manufacturer make its payments under the licensing agreement?
The inventor's son. A gratuitous assignment of contract rights automatically terminates upon the death of the assignor. Accordingly, the assignment to the corporation was revoked upon the inventor's death. However, a contract generally does not terminate upon the death of one of the parties. Thus, the manufacturer remains obligated to make its payments under the licensing agreement to a person who, by the terms of the inventor's will, has been devised the right to receive those payments.
On January 5, a buyer and seller contracted for the delivery of 100 widgets if they could be delivered by February 20. The agreement was made in a writing signed by both parties and provided that the buyer would pay the contract price of $1,000 upon delivery. On February 3, the buyer and seller orally agreed to postpone delivery until March 1. However, when the widgets arrived on March 1, the buyer refused to accept or pay for the widgets. If the seller sues the buyer for breach of contract, who is most likely to succeed in the action?
The seller, because the oral agreement on February 3 was not supported by consideration. A party whose duty is subject to the condition can waive the condition, either by words or by conduct. A party who indicates that a condition will not be enforced may be estopped from using that condition as a defense if the other party reasonably relied on the party's words or conduct that the condition has been waived. Here, the buyer and the seller agreed to postpone delivery (i.e., the buyer waived the condition) and it would be unjust for the buyer to now claim that the contract was breached.
A refrigeration-unit manufacturer contracted with a kitchen appliance store to sell and deliver 100 refrigeration units to the store at a price substantially lower than market value. The written and signed contract included the term "F.O.B. kitchen appliance store, on or before March 30." Due to an unforeseen strike by the shipping company, the manufacturer delivered the units to the store on April 18. The store suffered no material harm due to the delay. The refrigeration appliance industry generally allows appliance manufacturers a 30-day leeway for any contractually specified time of delivery, unless such leeway is expressly forbidden by the contract. If the store brings suit against the manufacturer for breach of contract, which of the following facts provides the manufacturer with the strongest defense?
There is evidence of trade usage in the refrigeration appliance industry allowing a 30-day leeway for appliance deliveries. Under the UCC, even if the terms of a written contract for the sale of goods appear to be unambiguous, a party may explain or supplement the terms by evidence of trade usage or course of dealings or performance. Trade usage is any practice or method of dealing in the particular business or industry that is practiced with such regularity so as to justify an expectation that it will be practiced in the instant case. Here, the manufacturer's strongest argument will be that a trade usage applies, and that the terms of the contract should be supplemented by trade usage in the industry allowing a 30-day leeway for appliance deliveries.
A jeweler who specialized in engagement rings assisted a man who was trying to pick out the perfect engagement ring. The man was inexperienced with the various cuts of diamonds and types of ring settings. Over the course of a few weeks, the jeweler and the man looked at all of the ring styles and discussed pricing based on the man's budget of $5,000. The man finally settled upon a square cut diamond with a prong setting that was priced at $5,500. The man initially offered the jeweler $4,500 for the ring. While the man and the jeweler were negotiating the price, the jeweler received a phone call regarding a family emergency. The jeweler told the man that he would email him an offer in the evening, and if they could "meet halfway," the jeweler would sell the ring to the man. The man agreed. That evening, both the jeweler and the man received emails from one another at the same time. The jeweler's email contained an offer to sell the ring for $5,000, and the man's email contained an offer to buy the ring for $5,000. Both emails (i) specified the same style of ring that the two parties had discussed earlier that day, (ii) required payment upon receipt of the ring in two weeks, and (iii) were signed with an electronic signature. Based upon their earlier discussions and the jeweler's email offer to sell the ring to him for $5,000, the man did not look for an engagement ring at any other jewelry store. When the man showed up two weeks later to pick up and pay for the ring, the jeweler denied that they had a binding contract and would not sell the ring. If the man sues the jeweler for breach of contract, will he likely succeed?
Yes, because both parties conveyed an intent to contract with one another through prior negotiations and the simultaneous emails. Under the UCC, a contract is formed if parties intend to contract, and there is a reasonably certain basis for giving a remedy. A sale-of-goods contract may be made in any manner sufficient to show agreement, even though the moment of its making is undetermined. Emails are considered signed writings that satisfy the SOF.
A father hoping to build a new playground for his children had a friend whose hobby was woodworking. One day over lunch, the two men discussed an arrangement in which the woodworker would build and deliver a swing set to the father for $2,000 within two weeks. After lunch, the woodworker sent an email to the father restating what had been discussed. The father immediately responded in a signed email stating "We have a deal. But please deliver the set within one week instead." The woodworker did not respond but began working on the swing set that day. Eight days later, the father called the woodworker to ask why the swing set had not been delivered. The woodworker stated that he intended to deliver the swing set within the two-week period originally discussed. He began to work more quickly to complete the swing set sooner and delivered the swing set two days early, but the father refused to pay him for it. Under the UCC, is the woodworker entitled to recover the $2,000?
Yes, because he delivered the swing set within two weeks. For a sale of goods where at least one party is a nonmerchant, an acceptance that contains a modification to the terms in the offer is nevertheless an acceptance. There is an exception if the acceptance is expressly conditioned on assent to the modified terms, in which case the acceptance would be a counteroffer, but that does not seem to have occurred here. In this case, the father did not say that he accepted if the woodworker delivered the set in a week, but rather accepted and added a different term. The additional term was not accepted so the terms are in accordance with the original contract.
A groom left his bride at the altar on the day of her wedding. The bride could not bear to keep any painful reminders of the occasion, so she offered to sell her wedding dress to one of her bridesmaids for $5,000. The bride stated that the offer would remain open for 30 days. The bridesmaid said she was interested but would have to think about it. A week later, the bridesmaid emailed the bride to ask if the price included a custom-made veil that the bride had worn. The bride did not respond to the bridesmaid's question. Within the 30-day period, the bridesmaid accepted the bride's initial offer of $5,000 for the wedding dress. In response, the bride stated that the bridesmaid could only buy the wedding dress for $6,000. Was a contract formed when the bridesmaid accepted the initial offer of $5,000?
Yes, because the bridesmaid's question did not constitute a counteroffer. A counteroffer is an offer made by an offeree to the offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer. An offeree's power of acceptance is terminated by the making of a counteroffer. A counteroffer acts as a rejection of the original offer and creates a new offer. However, mere suggestions or inquiries, including requests for clarification or statements of intent, made in response by the offeree do not constitute a counteroffer.
On March 1, a company contracted with a singer for the singer to perform for the company picnic on May 1 for a fee of $10,000. On March 17, the singer informed the company that she signed a contract to film a movie. She suggested that the company hire another singer to take her place at the picnic. On April 1, the company hired the recommended replacement singer to perform at its picnic for $15,000. On April 25, the original singer informed the company that she has decided not to take the movie deal and will be available to perform on May 1. Even though the original singer arrived at the picnic on May 1 ready to sing, the company let the replacement singer perform. The company refused to pay $10,000 to the original singer. Is the company likely to prevail in a breach of contract claim against the original singer?
Yes, because the company hired the replacement singer as a substitute for the original singer before she retracted her repudiation. The company's contract with the replacement singer as a substitute for the original singer's services constituted a material change in position and thus terminated the original singer's ability to retract her repudiation.
A widow offered to sell her small business, together with all of the business's assets, to a non-profit organization. The organization accepted, and on June 1, they signed and executed a contract providing for the sale of the business for $25,000 at the end of the month. When the organization's agent signed the contract, she orally informed the widow that the organization's duty to purchase the business was conditioned on obtaining approval from a local zoning board to convert the business's primary office into an affordable healthcare clinic. At the end of the month, the widow refused to honor the contract because the organization neglected to request the necessary approval from the zoning board. The organization sued the widow for breach of contract. The organization presented clear evidence that they had the necessary funds to perform on the contract at the end of the month, and that the zoning board would have routinely approved the organization's plans for the office. Is the organization likely to prevail in its action against the widow?
Yes, because the condition of zoning board approval can and has been waived by the organization. A party whose duty is subject to a condition can waive the condition, either by words or by conduct. Here, the organization has waived the condition by seeking to enforce the contract without the approval of the zoning board.
A manufacturer of t-shirts contracted with a new clothing store to sell the store 1,000 t-shirts per month for a period of two years. The clothing store's signature color for their clothing was an orange-tinted red color, called coquelicot, which is very difficult to replicate on a consistent basis. The contract specified that any t-shirts that were not coquelicot could be returned, but it was silent with regard to the return of any t-shirts for other reasons. One year into the contract, the store decided to switch to coquelicot-colored baseball hats instead of t-shirts. The store returned the most recent shipment of t-shirts to the manufacturer and demanded a refund. The manufacturer refused to grant the refund, and the store sued the manufacturer for damages. At trial, the manufacturer introduced the contract, which clearly stated that t-shirts that were not coquelicot could be returned. The store then attempted to introduce evidence that it had returned t-shirts for other reasons to the manufacturer in the past and received a refund. Is this evidence admissible?
Yes, because the evidence is relevant to show that the manufacturer had accepted the return of coquelicot-colored t-shirts in the past. Course-of-performance evidence is admissible under the UCC to explain or supplement a contract. A course of performance is a sequence of conduct that is relevant to understanding an agreement between the parties if: (i) the agreement involves repeated occasions for performance by a party, and (ii) the other party accepts performance without objection and with knowledge of the course of performance. Here, there were monthly purchases of t-shirts and evidence that the manufacturer had accepted returns of the coquelicot-colored t-shirts in the past. Therefore, this course of performance evidence is admissible.
A sister convinced her brother that they should open a small coffee shop. Their friend, a guitarist, suggested bringing his band to play live music and attract customers. He did not request any payment, saying the publicity would be good for the band. The siblings agreed, and the band started playing at the shop weekly. The coffee shop became a success, in no small part due to the band's performances. When a businessperson offered to buy the coffee shop from the siblings, they orally agreed to each pay $10,000 out of their share of the sale proceeds to the guitarist for his help in making the shop popular. The sister told the guitarist about their agreement. He was so delighted with it that he put a down payment on a new car. By the time the sale of the business was finalized, the brother had encountered financial difficulties. After the sale, the siblings signed a written contract stating that the sister would pay the guitarist $10,000 and her brother would pay him $5,000. If, after the sale, the brother pays the guitarist only $5,000, will he have a valid basis for action against the brother for another $5,000?
Yes, because the guitarist's reliance on the promised payment prevented the siblings from changing the obligations of their oral contract. The guitarist was an intended beneficiary of the siblings' oral agreement to each pay him $10,000. His rights under the contract vested when he made a down payment on a car in reliance on the agreement. The power of the siblings to modify their duties by subsequent agreement between themselves was terminated when the guitarist detrimentally relied on their promised performance.
A homeowner called a septic cleaning company and made arrangements for the company to remove the waste from the septic tank on the homeowner's property. After completing the job, the company mailed the homeowner a bill for $500, the fair market value of the services rendered by the company. The bill indicated that payment was due in 60 days. Upon receiving the bill, the homeowner called the company and informed it that, since he had lost his job due to an accident, he would not be paying the company's bill. The following day the company filed suit for breach of contract. Ten days later, the homeowner moved to dismiss the suit. The court granted the motion, dismissing the suit without prejudice. Is the court's dismissal proper?
Yes, because the vendor's complaint is premature. Under the doctrine of anticipatory repudiation, which is applicable when a promisor repudiates a promise before the time for performance is due, the promisee may treat the repudiation as a breach of contract and sue immediately. However, in a situation in which the date of performance has not passed and the only performance left is payment, the aggrieved party must wait until performance is due before filing suit. Here, despite the fact that the customer unequivocally stated that he would not pay for services rendered by the vendor, the customer's payment is the only performance left on the contract, and the vendor must therefore wait until the 60-day period expires.
